Firm You Haven’t Heard Of With $13M In 2013 Revenue IPO’d Today, Spiking To Valuation North Of $3B

So you are a company. You’re about six years old. You’ve raised $181 million dollars to date, including a Box-esque $100 million Series D bloc. The tough bit is that your revenue in 2013 was a mere $13 million. Even more troubling, your losses are accelerating, increasing from $19.9 million in 2011, to $35 million in 2012 to $62.2 million in 2013.

You lost $6.28 per share last year, so the obvious next move is to go public, yeah? Yeah.

So you do that, pricing your shares between $9 to $11. But demand is hot, so you move that up to $13 to $15 per share. In the end, you land on a price of $16 per share.

That per-share price puts your valuation at what? $1.39 billion? And you are going to snag $178 million presuming that you sell all 11.1 million shares on your IPO day.

Turns out you guessed too low. Investors, after watching you ratchet up your offer price from single digits, bounce your shares to $39.80 a share, spiking your valuation to, wait for it, more than $3 billion.

Naw, I’m not messing with you about some stupid story from 1999. That IPO happened today. The company is Castlight Health.

Surprised? The market appears to be betting that the company’s growing business backlog will rapidly expand its top line, and help the firm approach profitability. Here’s the company’s S-1 filing detailing its current aggregate-future-business scorecard:

[O]ur total backlog, which we define as including both cancellable and non-cancellable portions of our customer agreements that we have not yet billed, has increased from $44.0 million as of December 31, 2012 to $108.7 million as of December 31, 2013.

The company could have very strong gross margins: The cost of revenue for 13 million in 2013 top line was $125,000. So, you can see how the company reaches profitability provided that it can scale to service its full backlog in a timely manner.